The Australian share market looks set to begin the trading week on a positive note, after the Dow Jones Index pared gains in afternoon trade as investors mulled comments from Federal Reserve officials about the central bank’s stimulus program.
Wall Street opened higher on Friday but pulled back on its gains after Philadelphia Fed President Charles Plosser said the central bank faced "immense" challenges now that it had reduced bond-buying, and that it needed to be aware of a potential rapid rise in future inflation.
Volatility was exacerbated by light trading volume in the wake of the New Year's holiday, as well as a snowstorm in the northeast.
Figures
Wall Street was relatively flat all in all at the end of its Friday session: The Dow Jones Industrial Average added 29 points to close at 16,470, the S&P500 lost 1 point to close at 1,831 and the Nasdaq dropped 11 points to close at 4,132.
European markets made small gains: London’s FTSE lifted by 13 points, Paris added 20 points and Frankfurt jumped by 35 points.
Asian markets were at opposite ends of the spectrum – Tokyo’s Nikkei gained on a weaker yen, however Hong Kong stocks tumbled over 2 per cent on Friday - the worst performance in six months, following another weak set of data out of China.Tokyo’s Nikkei surged by 112 points, Hong Kong’s Hang Seng plunged 523 points, and China’s Shanghai Composite lost 26 points.
The Australian share market posted a lackluster start to the new year on Friday, amid light holiday trading volumes. The S&P/ASX 200 lost 18 points on Friday, chipping in to the weekly gain of 26 points to finish at 5,350. On the futures market the SPI is 23 points higher.
Currencies
The Australian dollar is sitting higher against the greenback. Currency strategists say our dollar is starting to gain ground against the euro and the British pound, and that is helping support the Australian dollar against other currencies. At 7am the Aussie was buying $US89.57 cents, 54.66 Pence Sterling, 93.93 Yen and 65.92 Euro cents.
Economic news
AIG will today release its performance of services index for December.
Company news
Aurora Oil & Gas Limited
(ASX:AUT) will cut spending on shale wells this year by slashing drilling on its own operated acreage as it moves to preserve cash and beef up its balance sheet. Aurora says capital spending will amount to $US495 million this year, which is down from 2013, but predicts output will jump by almost 50 per cent. Shares in Aurora Oil & Gas last traded at $2.98.
The Warrnambool Cheese & Butter Factory Co
(ASX:WCB) takeover tussle could be about to enter a fifth month. Canadian suitor Saputo Inc may extend its deadline for acceptances of its $9 per share offer for Warrnambool. Shares in WCB lifted 0.11 per cent on Friday to close at $9.26.
Commodities
Gold is up $13.40 to $US1,238.60 an ounce for the February contract on Comex. Silver is up $0.08 to $20.21 for March. Copper is down $0.03 at $3.35 a pound. Oil is down $1.48 at US$93.96 a barrel for February light crude in New York.
